We are pleased that co-blogger Scott Sumner has taken on one of the horrors about Penny production.
His posts made me fail to post in my article about Penny’s End Mise published in Hoover in March. The article is “Your Penny’s Thoughts?”, March 13, 2025, defines the idea. No, I couldn’t come up with that great title. My editor did that.
Sub-highlights:
The US government makes quite a penny (intended for Punid) with seignioge. That’s not what it was about scholarships, but more and more people use credit cards and cryptocurrency to buy good services. Still, that’s a fair amount.
The biggest profit from Seiigniorage is $100 billion. Printing one costs the federal government only 9.4 cells. So, if the Fed spends this $100, it will make a profit of $99.90. Not bad. Printing for $1 will charge you FRB.3.2 cells. So even a $1 invoice will still make 97 cells.
But minting a small coin will lose money for the Fed. In its 2024 annual report, US mint reports the production costs of each coin sect. The production cost was $0.03. In other words, the production cost was three times the value of penny. Interestingly, the Fed went underwater even with nickel, costing $0.11 more than twice that of nickel. That’s why the federal government has previously said that production nickel should also be stopped. You can’t tell the federal government to find coins that make money. Interestingly, the cost of producing Tell Me is $0.045, which is lower than the cost of producing nickel.
It surprised me at first, but it’s not supposed to have. First of all, nickel is bigger than I say. Secondly, nickel and ter are made up of roughly the same metal. Nickel is made up of 75% copper and 25% nickel. It is actually a capronickel that is just like an alloy. Interestingly, since 1866, except for diaries during World War II, nickel is made from capro nickel when the US government rocked nickel for military use. Tell consists of copper cores within the outer layer of Cuproníckel. The overall composition of the tument is 91.67 opposing copper and 8.33% nickel. Unlike nickel, the composition of Tement has changed dramatically. Before the 1965 Monetary Act removed silver from the dime, the dime was 90% silver compost and 10% copper compost. I still hide my silver dime and a lodging in my sock drawer. It’s clear why the Fed changed its Tell Dim configuration:
and:
That’s what I’m focusing on here, as you’ll get a lot of profit from removing pennies rather than nickel. How do you migrate?
First, most transactions do not require actual migration. Most people use credit or debit cards to purchase items. For example, if you beoucheve a Visa Card item for $19.99, Merchant Coug will charge you $19.99. There’s no need to change your hands. Let’s say that is the only thing you strive for that month and that you fully repay your credit card each month. You will pay your credit card EISHER by transferring funds electronically from your bank, or by writing and sending a check, as is now rare. Again, no penny is needed.
So the only transition needed is for those paying cash. How does it work? You can ask Canada for guidance. Under conservative former Prime Minister Stephen Harper, Canada’s Royal Mint developed penny in May 2012, and the Canadian government stopped distribution of them in February 2013. For example, if it went to $19.97, the cash register would be $19.95. However, if the bill was $19.98, the cash register was rounded up to $20.00. Interestingly, Penny is still fiat currency in Canada, but for the past decade I haven’t seen anyone using them. There was a small dish at the counter at the retail store, and there was a small dish that said, “Take the penny and leave the penny.” There’s no need.
Read the whole thing.
